RENEW
Wisconsin (RENEW) filed a petition on February 22 asking the Public Service
Commission (PSCW) to simplify the process under which distributed generators can
connect their generators to Wisconsin’s electrical grid. The vast majority of
these small generating facilities are fueled with locally available renewable
energy resources like biogas, solar, and wind.

RENEW’s
filing grew out of a year-long study that assessed how Wisconsin’s 10-year old interconnection
rule (PSC 119) compares with best practices established in other states.

“We
found that Wisconsin’s outdated rules
hurts distributed generators by adding complexity, time, and cost to the interconnection
process ,” said Don Wichert, RENEW’s interim Executive Director and study
coordinator. “Most of the renewable
energy systems coming on line now are owned by non-utility generators. Fixing
the problems in PSC 119 will lead to more renewable energy systems going in
faster and at a lower cost. Supported by 86 companies, organizations, and
individuals, RENEW’s petition identified 10 specific changes that, if adopted
by the PSC, would align Wisconsin’s interconnection procedures with national
best practices.

“Customer-owned renewable energy systems save
ratepayers money in many ways”, said Wichert.
“Because they offset electrical needs right where the electricity is
being used, distributed renewables supply clean electricity in a reliable and
affordable manner, avoiding potentially expensive investments in central
generating plants and costly transmission lines. Moreover, they create jobs and
support local businesses. These are all
positive public policy goals”, Wichert said.

RENEW
Wisconsin is an independent, nonprofit 501(c)(3)
that leads and represents businesses, organizations, and individuals who seek
more clean, renewable energy in Wisconsin.
More information on RENEW’s website: www.renewwisconsin.org.

The Port of Milwaukee announced this week that the wind turbine that supplies energy to the port’s administration building has been paying dividends to the city. In less than a year of operation, the turbine shifted electrical costs at the port by almost $15,000 dollars. In fact, the electrical utility actually paid the port for the surplus energy it produced.

Bill Ritter, delivering the keynote at RENEW 's Summit

This news is likely music to the ears of former Colorado Governor Bill Ritter, who championed alternative sources of energy during his time in office. Ritter is now the Director for the Center for the New Energy Economy at Colorado State University, where he is helping states across the country create plans to implement renewable energy economies. And he’s in Wisconsin this week as the keynote speaker at the RENEW's Energy Policy Summit in Madison.

Aggressive renewable energy standards
Ritter says energy issues first emerged as a priority in his political career when he was campaigning for governor in 2005 and 2006. His campaign focused on renewable energy as a way to move Colorado forward and it became a pillar of his administration’s agenda. Once in office, he signed 57 clean energy bills.

Now Colorado is one of the leaders in the country when it comes to alternative energy. Ritter says the state is on the path to supplying 30 percent renewable energy by 2020, “one of the most aggressive renewable energy standards in America.”

Today, Wisconsin has a renewable energy standard of 10 percent by 2015, but Ritter says a lot of that power comes from outside the state, whereas Colorado’s is mostly in-state.

“Actually our cost of power relative to the rest of America has gotten cheaper as we’ve pushed this very aggressive clean energy agenda,” he says. “We had a day last April where our primary and best run utility got 57 percent of all its energy that it provided Colorado customers from wind alone.”

Building a 'new energy economy'
Of course, the cost has gone down because of broad deployment of such methods. In building this “new energy economy,” Ritter says Colorado attracted manufacturing companies that focused on wind and solar energy, and promoted research and development among private companies and government entities.

“We really have this ecosystem built around advanced energy or clean energy, and really trying to say, ‘It could be domestic, it could be clean, it could help us create job and we can protect rate fares in the process,’” he says.

Facing challenges
But Ritter admits creating this “new energy economy” didn’t come without its hurdles. Some utilities and critics opposed the government creating a renewable energy standard, which at first was 10 percent by 2015.

“People say we don’t like standards because it’s a mandate,” Ritter says. “Quite frankly the entirely energy sector has been heavily regulated since it’s inception, and so to say something like renewable energy standards are a mandate and we should do away with it, I think it’s just wrong, because everything in energy is based on regulation. It is not the operation of free market and it’s that way by intention.”

So voters went to the ballot and passed the standard. Soon, after the state legislature put in a rate cap, the utilities were on board, approving of a doubling of the standard and eventually a tripling of it. Ritter says that’s because the utilities saw that they could make the benchmark, they could hold rates in check and get returns on their investment, and they could make customers happy.

“Actually our cost of power relative to the rest of America has gotten cheaper as we’ve pushed this very aggressive clean energy agenda." -former Colorado governor Bill Ritter

Dealing with the utilities was not the only problem the state encountered in getting behind renewable energy. The coal industry, which provided many mining jobs in the state, felt their market share was being taken by renewable energy. A plan to pay residents who built their own system and put power back onto the grid required some finagling. And naturally, political adversaries made it difficult for the legislation to get to Ritter's desk.

“I think the public liked it and got it, but I still had a difficult time politically with it, even with public support, because it doesn’t have the sort of intensity, the political intensity, that other issues might like the economy or job creation,” Ritter says.

He says his opponents claimed such an energy policy would lose jobs in the state, at a time when job creation was at a premium.

“That was really an awful thing to have said about you,” he says. “But our clean energy and clean tech sector wound up being the only sector that grew during the worst recession since the Great Depression in Colorado.”

Now Colorado is second in the country for solar jobs and number one per capita for employment for clean energy jobs overall, Ritter says.

Pushing the agenda
Based on his experience in Colorado, Ritter has some advice for Wisconsin in committing to renewable energy, which he says works handily with a free market. Leasing solar installations on buildings is one way to start.

“Last year over 80 percent of the rooftops in Colorado that installed solar were leased systems, so it’s a great economic development driver,” he says, citing similar success in California and Arizona.
At the Center for the New Energy Economy, Ritter says he is trying to push this whole agenda forward at the state level, from the financing to the R&D on advanced energy technologies to the practical implementation.

“How do we push this whole agenda forward at the state level, so a state can look at their energy economy and say, ‘We’re really about the 21st century,” and we’re tying domestic energy use with environmental issues, (and) economic development,” he says.

Set for Friday, January 11, 2013 in Madison, RENEW Wisconsin’s summit, called Powering Positive Action, will synthesize the ideas and aspirations of business leaders, elected officials, and clean energy advocates into an achievable policy agenda.

This year a bipartisan legislative panel will outline their energy policy goals and identify specific initiatives that can move forward in the upcoming session.

Senators Dale Schultz (R-Richland Center) and Jennifer Shilling (D-La Crosse), and Representatives Chris Taylor (D-Madison) and Gary Tauchen (R-Bonduel), and Chris Schoenherr, Deputy Secretary of the Department of Administration, have agreed to take part in the legislative panel.

Other plenary sessions will focus on policies and practices that advance jobs and economic development through in-state development of renewable energy. One promising initiative vigorously promoted by RENEW, called Clean Energy Choice, would allow businesses and residential households to directly access clean energy produced on their premises from third party-owned systems.

We would like policymakers to hear company representatives discuss the fit between on-site renewables and their ability to remain competitive in a period of great energy transition.

Over the lunch hour, RENEW will recognize a host of pioneering businesses that are advancing renewable energy use in Wisconsin. This year several businesses and nonprofits took the reins of the renewable energy marketplace, and we wish to honor their outstanding achievements.

Former Colorado governor Bill Ritter will deliver the keynote address. During his two terms, Ritter championed several innovative policies that are now fueling one of the healthiest energy economies in the nation.

Friday, December 07, 2012

Michael Vickerman's commentary in Midwest Energy News on the recent changes in WI renewable energy. Find the original post here.

Commentary: How Wisconsin regulators ‘tax’ renewable energy

RENEW Wisconsin's Michael Vickerman

Starting next January, the price of purchasing renewable energy voluntarily through monthly utility bills will spike to all-time highs, thanks to recent decisions rendered by the Public Service Commission of Wisconsin (PSCW) on two popular “green pricing” programs.

The thousands of Madison Gas & Electric (MGE) customers participating in the utility’s Green Power Tomorrow program will see their premiums jump from 2.5 cents/kWh to 4 cents/kWh. That’s an increase of 60 percent. To translate this into dollars and cents, an average MGE customer consuming 500 kWh of electricity per month and subscribing at the 100 percent level will pay $90 more in 2013 for the same amount of renewable kWh sold this year.

Residential customers of Milwaukee-based We Energies (WE) will see an even larger percentage increase next year. In that utility’s rate case, the PSCW jacked up the premium paid by Energy for Tomorrow subscribers by nearly 73 percent, from 1.39 cents to 2.4 cents/kWh. Energy for Tomorrow has more than 20,000 subscribers.

Back in 1999, the year both programs were launched, MGE and WE customers paid an extra 3.33 cents and 2.04 cents/kWh, respectively, for the renewable energy they sponsored. Come January 1st, MGE and WE will likely share the dubious distinction of being the only utilities in the country offering renewable energy at a higher rate than they did in the 1990’s. So much for progress.

Adding insult to injury, renewable program subscribers will be subject to general rate increases approved by the PSCW this November. The utilities sought higher rates to recover the costs of retrofitting older coal-fired power stations with modern pollution controls. The fact that the renewable generators leveraged by program participants will never need pollution control retrofits is wholly disregarded in determining the size of the premium.

This is unquestionably a subsidy that flows from program participants to all ratepayers.

How did this happen?
Since 1999, renewable generation costs have tumbled, while productivity has improved.
A frustrated program subscriber might well ask: If base utility rates are going up, and the cost of renewable electricity is declining, why are premiums going up instead of down?

The short answer is that wholesale electricity prices have sagged in recent years, owing to a combination of unsustainably low natural gas prices, stagnant demand, and rapid expansion of wind power displacing higher-cost generation. In contrast, the price of renewable energy procured under long-term contracts held steady. When prices dropped in the wholesale market beginning in late 2008, the gap between system energy and renewable sources widened.

Though accurate, the above explanation is deeply unsatisfying, because the wholesale “market” is concerned about one thing only: the marginal cost of producing electricity into the grid. Nothing else matters, including the expenditures approved by the PSCW to reduce emissions from older generators. Even though retail customers wind up footing the bill for those upgrades, the wholesale market does not treat pollution control retrofits as marginal costs. Not one cent paid by ratepayers for these expenditures is reflected in the prices that renewable generators compete against.

The net effect of this disconnect is to artificially suppress the price of electricity from older and dirtier generators relative to newer and cleaner electricity producers. Real markets factor in the cost of upgrading and replacing capital equipment that manufacture the product bought by customers. What we have instead is an artificial contrivance that sacrifices long-term considerations like clean air, resource diversity and regulatory risk for the short-term reward of low prices.

Indeed, it would be difficult to design a more punitive market structure for renewables than the one we have at present.

‘Swimming up a waterfall’
Pricing renewable energy against a market operating in real time also undermines a valuable attribute of renewable energy, namely its inherent price stability. In this environment, the only way a customer can directly benefit from a fixed-price energy source like solar is to self-generate at his or her premises to reduce consumption of grid-supplied electricity.

In setting the premium size, the PSCW relied on pricing data at a time when the regional wholesale market was near its cyclical bottom. Electricity prices are now edging upward as forward prices of natural gas have rebounded from historic lows earlier this year. It’s a safe bet that wholesale electricity prices will continue to increase in 2013.

This sets up the very real possibility that WE and MGE will collect more revenue than is necessary to cover the cost spread between system energy and the renewable energy supplies servicing their customers. Unfortunately, the next time the base premium for each utility can be adjusted is January 1, 2015.

For at least a century now, fossil fuels have been the default resource option for most utilities. Against this institutional bias, switching to renewable energy is akin to swimming upstream. But given how far backward the PSCW bent to accommodate utilities’ continued reliance on coal and natural gas, quite a few renewable energy subscribers may balk at the prospect of swimming up a waterfall.

In fairness to MGE and WE, the price hikes approved by the PSCW went well beyond the incremental increases proposed by the two utilities. That’s because the agency relies solely on the wholesale “market” metric described above that filters out all societal benefits from the equation. To the agency, renewables are another source of electrons that deserve no special consideration. And, in reaching its decision, the PSCW disregarded the potential impact that abrupt price hikes might have on customer participation.

Programs outliving their usefulness?
A significant loss in subscribership would be a regrettable outcome if the programs were still viable vehicles for leveraging new sources of renewable energy. Sadly, that is no longer the case.

Earlier this decade, WE and MGE pulled the plug on a popular feature of their programs, specifically the special solar energy buyback rates that were funded with participant dollars. This innovation, which spurred the installation of hundreds of solar electric systems in their territories, succeeded in elevating MGE and WE’s stature while achieving the aims of their participating customers. However, when the utilities eliminated their solar incentives, they also removed the principal rationale for subscribing to their programs.

It seems quite clear that the current crop of voluntary renewable energy programs have outlived their usefulness. They are stagnating under a market structure that distorts and amplifies their true costs as well as a regulatory climate that greatly discounts their benefits to ratepayers. What were once dynamic vehicles for increasing supplies of renewable energy are now little more than feel-good marketing exercises running on autopilot. The value proposition to customers just isn’t there anymore.

There is nothing out there to prevent utilities from revitalizing their green pricing programs and making them useful once again. Such an undertaking, however, would require them to do something they haven’t done before: present an affirmative case for adding more renewables into their energy mix.

To do that effectively, utilities would need to recognize that the fossil energy path leads to a dead-end and that renewables ought to be the default resource option going forward. From that starting point, designing a program in which modest customer premiums actually result in additional supplies of renewable energy should be a simple and straightforward exercise.

It’s the very least a responsible utility should do to reduce the impact of generating electricity on the one planet we are privileged to call home.

Wednesday, December 05, 2012

Neither encouraged nor discouraged by state legislative election results, RENEW Wisconsin will hold its second annual energy policy summit to shape policy initiatives that will accommodate customer-driven renewable installations in 2013 and beyond.

Set for Friday, January 11, 2013 in Madison, RENEW Wisconsin’s summit, called Powering Positive Action, aims to synthesize the ideas and aspirations of business leaders, elected officials, and clean energy advocates into an achievable policy agenda.

“This year a bipartisan legislative panel will outline their energy policy goals and identify specific initiatives that can move forward in the upcoming session,” said Michael Vickerman, RENEW Wisconsin’s Director of Policy and Programs.

Senator Dale Schultz (R-Richland Center), Representatives Chris Taylor (D-Madison) and Gary Tauchen (R-Bonduel), and Chris Schoenherr, Deputy Secretary of the Department of Administration, have agreed to take part in the legislative panel.

Other plenary sessions will focus on policies and practices that advance jobs and economic development through in-state development of renewable energy. One promising initiative vigorously promoted by RENEW, called Clean Energy Choice, would allow business and residential customers to directly access clean energy produced on their premises from third party-owned systems. “We would like policymakers to hear company representatives discuss the fit between on-site renewables and their ability to remain competitive in a period of great energy uncertainty,” Vickerman said.

Over the lunch hour, RENEW will recognize a host of pioneering businesses that are advancing renewable energy use in Wisconsin.

“This year businesses and nonprofits took the reins of the renewable energy marketplace, and we wish to honor their outstanding achievements,” Vickerman said.

Former Colorado governor Bill Ritter, will deliver the keynote address. During his two terms, Ritter championed several innovative policies that are now fueling one of the healthiest energy economies in the nation.

Registration details and other information about RENEW’s 2013 Energy Policy Summit are posted at www.renewwisconsin.org.

-- END --

RENEW Wisconsin is an independent, nonprofit 501(c)(3) organization that acts as a catalyst to advance a sustainable energy future through public policy and private sector initiatives. More information on RENEW’s Web site at www.renewwisconsin.org.

At this year's Summit we will lay the policy foundation for Powering Positive Action in 2013 through investments in new renewable infrastructure serving Wisconsin businesses and citizens.

Bill Ritter, Summit Keynote Speaker

We are thrilled to host former Colorado Governor, Bill Ritter, as the keynote speaker for the summit. During his time as governor, his administration made Colorado one of the leading states in the US in renewable energy.

Monday, November 12, 2012

Most Wisconsin electricity providers have already acquired all the renewable energy supplies they need to meet the state’s 10% target in 2015, according to the Public Service Commission (PSCW).

The agency’s annual compliance review showed that nearly 9% of electricity sold
by in-state electricity providers in 2011 originated from such renewable energy
resources as sunlight, biogas, hydro, landfill gas and wind, compared with 3%
in 2006.

“By any measure, the state’s Renewable
Energy Standard (RES) has been an unqualified success,” said Michael Vickerman,
program and policy director for RENEW Wisconsin. “From the standpoint of job
creation, resource diversity, price stability, environmental protection and
revenue generation, the RES has deliveredexceptional value to a state that is very dependent on imported fossil
fuels for electricity generation.”

Passed in 2006, the RES has been the most
powerful policy for driving growth in renewable electricity sales. Yet with so
many electricity providers already in compliance with their 2015 requirements,
the prospects for new investments in home-grown energy sources are uncertain.
“Right now, we don’t have a policy in
place for directing investments into clean energy after 2015,” Vickerman said.
“If we want to reap the economic and environmental benefits that come with
renewables, state lawmakers will have to extend the Renewable Energy Standard
or adopt a successor policy.”

“Investments in renewable resources not
only supply Wisconsin utility customers with clean energy, they also generate
work opportunities for local manufacturers and businesses, additional revenue
for local governments, and income for farmers,” said Vickerman.

“Renewable energy should be the
cornerstone of an economic development strategy that aims to increase the
state’s workforce and expand investment opportunities,” Vickerman said. “We
look forward to working with the Governor and the next Legislature to put in
place a realistic, low-cost policy framework that maintains the momentum
building from the current RES.”